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Concurrent Delays and Apportionment of Damages
William Ibbs, M.ASCE1 , Long D. Nguyen
2 and Lonny Simonian
3
Abstract: This paper focuses on the subject of concurrent delay from a general contractor-
subcontractor perspective. When there is a concurrent delay by multiple subcontractors, or
between the general contractor (GC) and other subcontractor(s) (subs), there has not been a
uniform approach as to how the liquidated damages (LDs) are apportioned. Previous research
seems to ignore this issue. This paper first reviews some relevant court cases. Using a
warehouse project as a case study, it then examines different practices that the GC could take in
apportioning damages of concurrent delays to both him/herself as well as to the responsible
subcontractors. Results are very inconsistent between and within the apportionment practices.
This supports an alternative hypothesis that apportionment is an important issue. Practitioners
should specify which apportionment practice will be used and under what circumstances it will
be applied in their subcontracts. Researchers may develop a more consistent and reliable
approach for this type of apportionment.
CE Database Subject Headings: Claims; Contracts; Delay time; Contractors; Court
decisions; Damage assessment; Litigation; Subcontractors
1 Prof. of Const. Mgt., Civ. and Environ. Engr. Dept., Univ. of CA, Berkeley, CA 94720; and President, The Ibbs
Consulting Group, Inc. E-mail: [email protected]
2 Lecturer, Division of Construction Engineering and Management, Faculty of Civil Engineering, Ho Chi Minh City
University of Technology, Ho Chi Minh City, Vietnam. E-mail: [email protected]
3 Ph.D. Candidate, Dept. of Civil and Environ. Engrg., Univ. of California, Berkeley CA 94720. E-mail:
Journal of Construction Engineering and Management. Submitted May 7, 2009; accepted June 23, 2010; posted ahead of print July 17, 2010. doi:10.1061/(ASCE)CO.1943-7862.0000259
Copyright 2010 by the American Society of Civil Engineers
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Introduction
Concurrent delay is an interesting but challenging issue in construction claims. When discussing
concurrent delays, one usually relates them to overlapping delays attributable to both the owner
and general contractor (GC). In these circumstances, the owner typically extends the completion
date but no compensation is awarded to the GC. Owners, therefore, often try to demonstrate that
a delay is either third party-caused or a concurrent delay, and thus excusable but
noncompensable (Zack, 2001). For that reason, calls for apportionment of concurrent delays and
their damages are increasingly heard in the construction industry (i.e. Kraiem and Diekmann
1987; Kelleher 2005).
Nonetheless, the subject of concurrent delay at the subcontract level is equally important though
it has been rarely discussed in literature. When a delay is deemed to be caused by the GC the
owner will assess LDs per the terms of the contract. If the delay is caused by a single
subcontractor (sub) or supplier (hereafter subcontractor also including supplier), the GC will pass
those LDs to the responsible subcontractor, assuming that there are flow-through provisions in
the GC-subcontractor contract. However, when there is a concurrent delay by multiple
subcontractors, or between the general contractor and other subcontractor(s), there has not been a
uniform approach as to how the LDs are apportioned. Because previous writers have glossed
over concurrent delays at the subcontract level, a null hypothesis is that apportionment is not an
important issue because attention has not been devoted to the subject by previous writers
Apportionment of concurrent, inexcusable delays is essential to general contractors who have to
distribute delay responsibility among their subcontractors and suppliers (Bramble and Callahan
Journal of Construction Engineering and Management. Submitted May 7, 2009; accepted June 23, 2010; posted ahead of print July 17, 2010. doi:10.1061/(ASCE)CO.1943-7862.0000259
Copyright 2010 by the American Society of Civil Engineers
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2000). This paper first reviews the literature of concurrent delays and some relevant legal cases.
It then proposes and examines the different approaches that the GC could take in apportioning
damages of concurrent delays to both him/herself as well as to the responsible subcontractors. A
hypothetical warehouse construction project where the GC would be accessed LDs is used to
demonstrate the proposed apportionment approaches. That is, the objective of this paper is to
show that different approaches yield different results and that apportionment is a complicated
and judgmental issue. The industry practitioners would benefit from understanding different
approaches presented in this paper and choosing an appropriate one for their subcontracts.
Concurrent Delays
Concurrent delays occur frequently, particularly at the peak of a project when multiple-
responsibility activities are being performed simultaneously (Baram 2000). Analysis of schedule
delays takes a major leap in complexity when there are multiple sources of delay with
interrelated impacts (Galloway and Nielsen 1990; Kutil and Ness 1997). This section reviews
the concept of concurrent delays, conditions of its occurrence, and apportionment of concurrent
delays.
The Concept of Concurrent Delays
Schedule delay analysis is among the most challenging tasks in claims-related issues. This
analysis becomes more complicated when concurrent delays have occurred in the project.
Navigating the seas of concurrent delays is possibly the most challenging task faced by a
construction lawyer (Hughes and Ulwelling 1992).
Journal of Construction Engineering and Management. Submitted May 7, 2009; accepted June 23, 2010; posted ahead of print July 17, 2010. doi:10.1061/(ASCE)CO.1943-7862.0000259
Copyright 2010 by the American Society of Civil Engineers
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Concurrent delay is customarily described as two or more delays that occur at the same time,
either of which would cause a project delay. If either of them had not occurred, the project
schedule would have been delayed by the other (Stumpf 2000). However, there is no consistent
agreement on what concurrent delay actually means (Peters 2003). Another definition is that
delay concurrency occurs when two or more separate causes of events delay the project within a
specific time period (Baram 2000). Simultaneous delays, commingled delays, and intertwined
delays are other terms used to interchange for concurrent delays.
Conditions for Occurrence of Concurrency
Hughes and Ulwelling (1992) reveal that the word “concurrent” describes either temporal
concurrence or causal concurrence. They also claim that: (i) while the word “concurrent” may
appropriately apply to temporally concurrent events, temporal concurrence is irrelevant for the
purpose of attempting to assess liability for project delay; and (ii) the actual issue in construction
is whether two events are concurrent in their causation of the project delay.
Differentiation between concurrent delays and those which simply absorb float requires a
thorough knowledge of the facts, an understanding of the basis of CPM analysis, and a
determination of whether three key factors exist: (i) the delays are critical; (ii) the delays are
independent; and (3) the delays occur during the same time period (Boe 2004). More broadly,
Ponce de Leon (1987) points out the occurrence of concurrency in construction as follows:
Two unrelated delays taking place in an overlapping timeframe are truly concurrent
only if both delays fall on parallel critical paths.
Two unrelated delays arising at quite different timeframes are ultimately concurrent if
they fall on two as-built critical paths.
Journal of Construction Engineering and Management. Submitted May 7, 2009; accepted June 23, 2010; posted ahead of print July 17, 2010. doi:10.1061/(ASCE)CO.1943-7862.0000259
Copyright 2010 by the American Society of Civil Engineers
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Apportionment of Concurrent Delays
Analysis of concurrent delays raises various issues. This is because both owners and contractors
employ concurrent delays as a strong defense tool against each other (Baram 2000). For instance,
owners use them to protect their interest in obtaining liquidated damages, while contractors use
them to neutralize or waive their inexcusable delays and hence avoid damage entitlement (Baram
2000).
Courts, boards, practitioners, researchers are generally inconsistent in terms of both definition, as
mentioned earlier, and apportionment of concurrent delays. A recent empirical study (Scott and
Harris 2004) shows that there is wide divergence among contractors, contract administrators, and
claims consultants about issues related to concurrent delays. A summary of law cases that
treated concurrent delays differently can be found in James (1991).
General views consider concurrent delays as being similar to excusable delays. That is,
contractors are entitled time extension only. When a compensable delay is concurrent with an
inexcusable delay, this scenario follows an “easy rule” or “contributory negligence”. However, a
recent trend advocates an equitable apportionment when compensable and inexcusable
concurrent delays occur. This trend is described as “fair rule” (Kraiem and Diekmann 1987) or
“comparative negligence” (Hughes and Ulwelling 1992). Fair apportionment means
apportionment of days and/or dollars. These different rules can be derived from two different
doctrines: the doctrine of contributory negligence and the doctrine of comparative negligence
(Hughes and Ulwelling 1992). Ibbs and Nguyen (2007) propose an approach for quantifying
field-overhead damages. This approach supports such fair apportionment.
Journal of Construction Engineering and Management. Submitted May 7, 2009; accepted June 23, 2010; posted ahead of print July 17, 2010. doi:10.1061/(ASCE)CO.1943-7862.0000259
Copyright 2010 by the American Society of Civil Engineers
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Undoubtedly, it is more equitable and reasonable to apportion damages in concurrent delay
circumstances. Current practice reveals that courts and boards can adopt the doctrine of
comparative negligence for solving concurrent delays. However, the research literature mostly
discusses concurrent delays between owners and contractors. It does not get into the level of
detail that this paper does. Therefore, the only critique that can be offered is that previous writers
have glossed over such important issues. This paper focuses on concurrent delays at the
subcontract level.
Case Law Background
One of the greatest areas of conflict between a contractor and subcontractor in a construction
project is caused by conflicts related to the timely performance of the work. The effect of
construction delays on a project may result not only in claims from the owner against the general
contractor, but also between the general contractor and various other contractors affected by the
delay. Therefore, the lack of performance by a subcontractor may have an enormous effect on
the performance of the project.
Acme Process Equip. Co. v. United States – 1965
When a contractor has attempted to impose liquidated damages under a situation of mutual delay,
the courts in the past have generally not attempted to apportion the damages, but have simply
held that the provisions of the contract with reference to liquidated damages be annulled. The
courts had adopted such a rule to avoid speculation regarding the relative delay caused by the
parties. Acme Process Equip. Co. v. United States (1965) involved the denial of liquidated
Journal of Construction Engineering and Management. Submitted May 7, 2009; accepted June 23, 2010; posted ahead of print July 17, 2010. doi:10.1061/(ASCE)CO.1943-7862.0000259
Copyright 2010 by the American Society of Civil Engineers
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damages upon a finding of mutual delay. In Acme the court stated: "[W]here delays are caused
by both parties to the contract the court will not attempt to apportion them, but will simply hold
that the provisions of the contract with reference to liquidated damages will be annulled.”
Pathman Construction Company v. Hi-Way Elec. Company – 1978
The case Pathman Construction Company v. Hi-Way Elec. Company (1978) broke new ground
in that the court apportioned delay days between the GC and sub on a pro-rata basis. This case
was an action for damages sustained by the plaintiff, Pathman (the GC), allegedly due to the
delay of defendant, Hi-way (the electrical subcontractor), in performing its work under a
subcontract agreement.
As part of their scope of work Hi-way was required to install header duct, hollow tubing through
which electrical conduit is run, upon the cellular decks installed under Pathman's supervision.
The first serious problem relating to Hi-way‟s progress involved its late submission of the shop
drawings and material lists required by the subcontract. The second phase of the project for
which damages were sought against Hi-way included the installation of ceiling light fixtures. At
the conclusion of construction the project owner, the General Services Administration (GSA),
withheld $50,000 from its final remittance to Pathman as liquidated damages for the 122 days the
entire project had been delayed. Pathman filed an action to recover damages attributable to Hi-
way‟s alleged delay in performing under the subcontract. Hi-way counterclaimed, demanding a
setoff in the amount of $56,711.18 for extra work performed and damages allegedly sustained
due to Pathman's failure to properly supervise the project.
Journal of Construction Engineering and Management. Submitted May 7, 2009; accepted June 23, 2010; posted ahead of print July 17, 2010. doi:10.1061/(ASCE)CO.1943-7862.0000259
Copyright 2010 by the American Society of Civil Engineers
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The trial court found that Hi-way was responsible for delaying the installation of header duct 49
of the 69 days alleged by Pathman. With regard to the light fixtures, the court found that Hi-way
was responsible for 29 days of the 45-day delay claimed by Pathman. However, as a total figure,
the court held Hi-way responsible for only 74 days of the entire 122 days the project had been
delayed. In calculating damages, the trial court held Hi-way liable to Pathman for $110,000 or
74/122 (approximately 60%) of the $170,312 in total damages claimed by Pathman. The trial
court dismissed Hi-way‟s counterclaim for negligent supervision but awarded Hi-way
$17,446.07 on its counterclaim for extra work performed on the project. Accordingly, the trial
court entered a judgment in favor of Pathman for the net amount of $92,553.93.
Calumet Constr. Corp. v. The Metropolitan Sanitary District of Greater Chicago – 1988
In the case of Calumet Construction Corporation v. The Metropolitan Sanitary District (MSD) of
Greater Chicago (1988), Calumet sought damages for certain alleged breaches of the contract by
the MSD, as well as the return of liquidated damages which the MSD had withheld from the
monies it owed Calumet for delays in Calumet's performance under the contract. Calumet
argued that because the MSD contributed to the delays in the work and fault could not be
apportioned under the liquidated damages clause of the contract, the entire amount of liquidated
damages, $346,000, should be returned to Calumet. The MSD argued that, pursuant to the terms
of the contract, it had granted day-for-day extensions to Calumet for the delays it (the MSD) had
caused, that there was a question of fact concerning who was responsible for the additional
alleged delays, and that, contrary to Calumet‟s contention, the liquidated damages could be
apportioned on the basis of fault under the terms of the contract and was, thus, enforceable.
Journal of Construction Engineering and Management. Submitted May 7, 2009; accepted June 23, 2010; posted ahead of print July 17, 2010. doi:10.1061/(ASCE)CO.1943-7862.0000259
Copyright 2010 by the American Society of Civil Engineers
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The MSD contended that the court should adopt the modern rule of apportionment and enforce
the liquidated damages provision accordingly. It argued that the policy behind the rule of
apportionment was sound, especially in complex construction contracts such as the one presented
here, because in these types of cases there will always be at least some delay, albeit unintentional,
attributable to the owner. If the court were to adopt the harsh rule of nonapportionment, it
argued, the end result would be that liquidated damages clauses would never be enforceable in
the large, complex construction contracts for which they were intended, since there will always
be some unintentional delay attributable to the owner. Thus, the MSD concluded that the trial
court should have enforced the liquidated damages clause and applied the modern rule of
apportionment.
The court found no merit in Calumet‟s contention that it is too difficult to apportion fault under a
liquidated damages clause, and concluded:
“[A] court would have no more difficulty ascertaining proportional fault under a
liquidated damages clause than it would in a case of comparative negligence involving
actual damages. Hence, we conclude that the older rule of nonapportionment is too harsh
and not in accord with current policy in cases concerning a valid liquidated damages
clause. We, therefore, hold that the modern rule of apportionment should be applied
here.”
The United States of America for the use of Belt Con Construction, Inc. v. Metric
Construction Co., Inc.; Safeco Insurance Company of America – 2009
Journal of Construction Engineering and Management. Submitted May 7, 2009; accepted June 23, 2010; posted ahead of print July 17, 2010. doi:10.1061/(ASCE)CO.1943-7862.0000259
Copyright 2010 by the American Society of Civil Engineers
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This case involved a concurrent delay dispute, among other things, between Belt Con
(masonry subcontractor) and Metric (general contractor). This dispute arose when Metric
withheld final payment from Belt Con due to Belt Con‟s contribution to inexcusable delays.
Belt Con‟s expert testified in some of the Belt Con-caused delay was non-critical and some
was concurrent with delay caused by the concrete subcontractor. The District Court ruled in
favor of Belt Con because Metric distributed full delay responsibility to Belt Con regardless
of the contributions of other subcontractors (i.e., concrete subcontractor). The U.S. Court of
Appeals upheld the District Court citing that “Metric did not allocate concurrent damages in
good faith.” The District Court reasoned:
“Metric is correct that the Court can, where appropriate and the evidence so supports,
apportion delay… The Court will not hesitate to undertake that task where appropriate.
Metric has not, however, with its factual presentation or its legal arguments, convinced
the Court that it should do so in this case.”
This decision indicates that though apportioning concurrent delays is allowable at the subcontract
level, courts will not support this if a general contractor does not appropriately apportion
responsibility for delay among its subcontractors. In this particular case, the District Court “did
not find [Metric‟s experts‟] methodology, evidence, or testimony reliable.”
Assessment of Court Cases
These cases illustrate a progression, over the course of three decades, in the court‟s view on
apportionment. The courts included both the United States Supreme Court and a state appellate
court. The cases range from a general contractor versus a local agency (GC/owner), a general
Journal of Construction Engineering and Management. Submitted May 7, 2009; accepted June 23, 2010; posted ahead of print July 17, 2010. doi:10.1061/(ASCE)CO.1943-7862.0000259
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contractor versus a subcontractor (GC/sub), and the federal government versus a supplier
(owner/supplier).
The Pathman case is interesting in that the court ruled that when there is sufficient evidence to
make a reasonably certain division of responsibility for delay, the assessment of damages may be
allocated among the parties. Although the task before the court in Pathman was particularly
difficult, since the performance of the work was sequential and the delay was the result of
multiple causes, the court decided that it was not impossible to apportion delays. This was
reinforced in Calumet, where the court reaffirmed their right and ability to apportionment.
Technological advances and use of computers to devise work schedules and chart progress on a
particular project have facilitated the court‟s ability to allocate damages. Therefore, the court is
not reluctant to allocate responsibility for actual damages resulting from mutual delay among the
parties if it is supported by sufficient evidence.
As a general rule the plaintiff carries the burden of proving a delay claim, the extent of the delay,
and that they were harmed by the delay. According to well-settled law, the party claiming delay
damages must demonstrate (1) what delays occurred; (2) whether the delays are compensable; (3)
who caused the delays; (4) whether the delay was offset by concurrent delays such as the delays
of the opposing party or by compensable delays; and (5) the relationship between the delay and
damages claimed (Hart, 2006). In establishing a causal link between delay and the damages
claimed, a contractor must demonstrate that the contractee‟s actions affected activities on the
critical path of the contractor‟s performance of the contract. The party seeking damages for the
Journal of Construction Engineering and Management. Submitted May 7, 2009; accepted June 23, 2010; posted ahead of print July 17, 2010. doi:10.1061/(ASCE)CO.1943-7862.0000259
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delay bears the burden of establishing with a reasonable degree of certainty that damages were
caused and the amount of the damages.
The court ruled in Premier Electrical Construction Company v. American National Bank of
Chicago (1995) that apportionment of damages in a case of mutual delay is a question of fact,
and the burden is on the party claiming such damages to prove that the damages were caused by
default of the party charged, separate from any damages that may have resulted from the acts of
the claimant. When there is sufficient evidence to allow the court to make a reasonably certain
division of responsibility for delay, the assessment of damages may be allocated among multiple
parties, even though the performance of work is sequential and the delay is the result of many
causes (Carter et al.,1992). However, damages must be proven with reasonable certainty to
assure a fair and just result – the claimant can meet this requirement by presenting a before-and-
after comparison accompanied by a plausible, though not necessarily conclusive, connection
between the baseline and as-built schedules and the associated wrongdoing of the defendant.
The following section shows different ways that this comparison can be expressed as a way to
apportion delays. They are alternatives for general contractors and subcontractors when
negotiating and apportioning damages of concurrent delays. They can also help legal bodies
solve future disputes as to concurrent delays at the subcontract level. A hypothetical case study
is also presented to demonstrate the proposed apportionment alternatives.
Proposed Apportionment Methods
Journal of Construction Engineering and Management. Submitted May 7, 2009; accepted June 23, 2010; posted ahead of print July 17, 2010. doi:10.1061/(ASCE)CO.1943-7862.0000259
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As previously discussed the courts have only recently examined apportioning delay damages
among a general contractor and subcontractor(s), where concurrent delays occur. If a concurrent
delay is caused by the owner and contractor, the contractor is typically granted only a time
extension. However, when a concurrent delay is caused by the general contractor and
subcontractor(s), it is apparent that this concurrent delay is truly an inexcusable delay. As such
the general contractor has to pay the owner actual or liquidated damages. This requires that the
general contractor seek an acceptable method for distributing these damages among responsible
parties. Unfortunately, such a method is not always available.
For that reason potential practices are presented to apportion damages of concurrent delays in
this case study. They are 1) company count-, 2) contract value-, 3) direct cost-, and 4) labor
hour-based methods. Requirements and details of data generally differ from this practice to
another. Depending on availability and acceptability of data, the last three methods either use
original or actual data to evaluate apportioning weights.
Company Count-Based Apportionment
The company count-based method shares delay damages equally to each corporate party who
contributed to a certain concurrent delay. The method is very easy to use and generally requires
the least amount of project data. However, apportionment is arbitrary and often unreasonable
because it does not take into account different levels of effort of parties responsible. The
formula for apportioning damages is as follows:
Damages Paid by a Party Responsible = Actual or Liquidated Damages
Number of Parties Responsible
Journal of Construction Engineering and Management. Submitted May 7, 2009; accepted June 23, 2010; posted ahead of print July 17, 2010. doi:10.1061/(ASCE)CO.1943-7862.0000259
Copyright 2010 by the American Society of Civil Engineers
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Contract Value-Based Apportionment
This method uses contract values to calculate apportioning weights. Contract values are
specified in either original or modified contracts. These monetary values are proportional or
representative for company involvement in the project. It is moderately easy to use. Contract
values are almost always available yet it is sometimes difficult to distribute them to delayed
activities and/or delay period under assessment. The general formula is:
Damages Paid by the ith
Party Responsible =
Contract Value of Party i x Actual or Liquidated Damages
Ʃ Contract Values of Parties Responsible
Direct Cost-Based Apportionment
This method uses direct costs to calculate apportioning weights. Again, direct costs are either
estimated or actual. Advantages and disadvantages are similar to those of the contract value-
based apportionment. However, direct costs are typically more difficult to obtain compared to
contract values. The general formula is also similar to contract value-based apportionment:
Damages Paid by the ith
Party Responsible =
Direct Cost of Party i x Actual or Liquidated Damages
Ʃ Direct Costs of Parties Responsible
Labor Hour-Based Apportionment
This method uses labor hours to calculate apportioning weights. Similar to contract value- and
direct cost-based methods, labor hours are either planned or actual. It is somewhat easy to use.
Journal of Construction Engineering and Management. Submitted May 7, 2009; accepted June 23, 2010; posted ahead of print July 17, 2010. doi:10.1061/(ASCE)CO.1943-7862.0000259
Copyright 2010 by the American Society of Civil Engineers
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However, labor hours are not readily accessed for delayed activities and delay periods unless
project data are well-maintained and updated. The general formula is also similar to those of the
above methods:
Damages Paid by the ith
Party Responsible =
Labor Hours of Party i x Actual or Liquidated Damages
Ʃ Labor Hours of Parties Responsible
Hypothetical Case Study
The following case study is used to illustrate different practices for apportioning damages
between a general contractor and his subcontractors and suppliers. The rationale for using a
hypothetical project is that we can amply demonstrate the variability that results from the
different apportionment methods. Hypothetical case studies have been widely used for similar
purposes in literature (i.e., Hegazy and Zhang 2005; de la Garza et al. 2007; Sakka and El-
Sayegh 2007; Nguyen and Ibbs 2008).
Description
A warehouse construction project has nine major activities that are performed by different parties.
Table 1 shows these activities, their durations, predecessors, and responsible parties.
Responsible parties include the general contractor and five subcontractors, namely subs A, B, C,
D, and E. The original project duration is 70 days (Figure 1). The contract between the owner
and general contractor stipulates $30,000 per day as liquidated damages.
<Insert Table 1 and Figure 1 about here>
Journal of Construction Engineering and Management. Submitted May 7, 2009; accepted June 23, 2010; posted ahead of print July 17, 2010. doi:10.1061/(ASCE)CO.1943-7862.0000259
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During construction, the project was delayed 10 days. Table 2 summarizes delaying events
occurring on seven activities. Excavation was delayed one day due to unanticipated inclement
weather. The shortage of ready-mixed concrete delayed the installation of footings four days.
Offsite steel frame fabrication was extended 10 days because the supplier of sub A failed to
deliver cold-formed steel on time. Similarly, subs B, C, D, and E failed to finish their activities
as planned. Specifically, roofing, walls and doors, mechanical work, and electrical work were
delayed two, five, five, and two delays, respectively. The next two sections present how current
practices analyze and apportion delays and their financial impacts.
<Insert Table 2 about here>
Delay Analysis
Delay analysis is needed to identify delay responsibility since many delaying events occurred
during the warehouse construction. Figure 2 depicts the as-built schedule, with solid bars
presenting actual activities. The baseline or as-planned schedule is also incorporated for
comparison. The actual project duration was 80 days. In this case, schedule window analysis is
employed for apportioning delay days. It is the best available option for delay analysis (Finke,
1999). Discussion of this method and others are beyond the scope of this paper.
<Insert Figure 2 about here>
Journal of Construction Engineering and Management. Submitted May 7, 2009; accepted June 23, 2010; posted ahead of print July 17, 2010. doi:10.1061/(ASCE)CO.1943-7862.0000259
Copyright 2010 by the American Society of Civil Engineers
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Table 3 summarizes the results of the window analysis. Based on the delaying events, five
reasonable windows are dates 1 – 11, 12 – 35, 36 – 37, 48 – 72, and 72 – 80. Accordingly the
ten-day project delay includes: one-day excusable and non-compensable; four-day concurrent
between general contractor and subcontractor A; two-day concurrent among subcontractors C, D,
and E; and three-day inexcusable by subcontractor D. Thus nine of the ten delay days are
inexcusable from the viewpoint of the owner. On one hand the general contractor has to pay
$270,000 (9 days x $30,000) liquidated damages to the owner. On the other hand the general
contractor needs to apportion this amount of financial damages to him/herself and his/her
subcontractor(s).
<Insert Table 3 about here>
Apportionment of Damages
Table 4 shows cost data for this warehouse construction project; including contract values, direct
costs, and labor hours for various work packages. In turn each of them consists of both original
(bid) and actual (final) data. Based on the proposed apportionment methods, delay damages can
be apportioned and allocated to the general contractor and its subcontractors.
<Insert Table 4 about here>
Taking window number 4 (dates 48 – 72, Table 3) as an example, we can distribute delay
damages to responsible parties using the four proposed apportionment methods as follows:
Journal of Construction Engineering and Management. Submitted May 7, 2009; accepted June 23, 2010; posted ahead of print July 17, 2010. doi:10.1061/(ASCE)CO.1943-7862.0000259
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Company count-based apportionment: Damages Paid by Sub C (or D, E) = (2 x
30,000)/3= $20,000.
Contract value-based apportionment with the use of original contract values: Damages
Paid by Sub C = [200,000/(200,000 + 150,000 + 100,000)] x 2 x 30,000 = $26,667.
Direct cost-based apportionment with the use of original direct costs: Damages Paid by
Sub C = [180,000/(180,000 + 120,000 + 85,000)] x 2 x 30,000 = $28,052.
Labor hour-based apportionment with the use of original labor hours: Damages Paid by
Sub C = [960/(960 + 2,400 + 1,680)] x 2 x 30,000 = $11,429.
Table 5 summarizes apportionment outcomes with the calculation process similar to the above
example. That is, the distributions of damages to the general contractor and subcontractors in
windows 2 and 5 are similar to those in window 4. Table 5 does not include windows 1 and 3
because there is either no delay or excusable delay in these windows.
<Insert Table 5 about here>
Discussion
Apportionment analysis is far from consistent. Different practices obviously yield different
apportionment results. This reveals that the null hypothesis is not accepted because the case
study demonstrates substantial differences in the outcome depending on which apportionment
methodology is chosen. For instance, the general contractor has to pay apportioned damages
ranging from $18,113 (original direct cost-based) to $60,000 (company count-based). This
Journal of Construction Engineering and Management. Submitted May 7, 2009; accepted June 23, 2010; posted ahead of print July 17, 2010. doi:10.1061/(ASCE)CO.1943-7862.0000259
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explains why apportionment of damages in concurrent delays between a general contractor and
subcontractors or among subcontractors is controversial and often causes disputes. In addition,
whether contract values, direct costs, and labor hours for the whole (sub)contracts, for only
delayed activities, or for only delay periods under assessment are used in the proposed methods
to apportion damages is contentious. This is because each contract or subcontract may consist of
many activities that are performed in different periods of time yet delaying events only impact
some activities in some time periods. As such, within an apportionment method, results can be
inconsistent. It should be noted that the apportionment analysis for this case study (Table 5) uses
contract values, direct costs, and labor hours of delayed activities.
Subcontracts should specify which apportionment method/practice will be used if concurrent
delays occur to deal with result inconsistency between and within methods. This also guides the
parties as to which project data must be recorded for apportionment analysis if concurrent delays
really occur. For example, in Virginia Beach Mechanical Services, Inc. v. Samco Construction
Company (1999), the subcontractor (Mechanical Services, Inc.) faced the burden of proving
delay damages. The Court ruled that the subcontractor did not provide a reasonable basis for
apportioning damages among the general contractor (Samco) and other subcontractors, who were
apparently a critical factor in the delay that occurred (Hart, 2006).
The above methods are similarly applied to the case of distributing the general contractor‟s
damages to subcontractors who caused concurrent delays. The case study demonstrates how
liquidated damages that the general contractor has to pay to the owner are apportioned between
the general contractor and his/her subcontractors. Some subcontracts nevertheless have a
Journal of Construction Engineering and Management. Submitted May 7, 2009; accepted June 23, 2010; posted ahead of print July 17, 2010. doi:10.1061/(ASCE)CO.1943-7862.0000259
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liquidated damages clause, or the like, that the general contractor can use to recover delay
damages. Additionally, liquidated damages that a general contractor accesses from his/her
subcontractors may be limited to the amount the general contractor has paid the owner (Kelleher,
2005). For instance, in Hall Construction Company v. Beynon (1987), the Florida District Court
of Appeals held that the contractor‟s recovery of delay damages was limited to the amount paid
to the owner since a purchase order to a supplier contained a pass-through of the liquidated
damages clause. Thus, the subcontracts should also stipulate under what circumstances
apportionment analysis will be applied.
Conclusions
Proper apportionment of damages in concurrent delay from a general contractor-subcontractor
perspective is both noteworthy and imperative. There is no universally-agreed upon approach
for apportioning delay damages when there is a concurrent delay by multiple subcontractors or
between the general contractor and other subcontractor(s). This paper has presented different
approaches for apportioning damages for concurrent delays caused by the general contractors
and his/her subcontractors. They include company count-, contract value-, direct cost-, and labor
hour-based apportionment analyses. It shows that results are very inconsistent between and
within the apportionment practices. This does not support the null hypothesis that apportionment
is not a significant issue. The case study demonstrates substantial differences in the outcome
depending on which apportionment approach is used. Subcontracts should specify which
apportionment method/practice will be used when concurrent delays occur, in order to deal with
the resultant inconsistency between and within methods. They should also stipulate under what
Journal of Construction Engineering and Management. Submitted May 7, 2009; accepted June 23, 2010; posted ahead of print July 17, 2010. doi:10.1061/(ASCE)CO.1943-7862.0000259
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circumstances apportionment analysis will be applied. Future research is needed to develop a
more reliable method for this kind of apportionment.
Journal of Construction Engineering and Management. Submitted May 7, 2009; accepted June 23, 2010; posted ahead of print July 17, 2010. doi:10.1061/(ASCE)CO.1943-7862.0000259
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Journal of Construction Engineering and Management. Submitted May 7, 2009; accepted June 23, 2010; posted ahead of print July 17, 2010. doi:10.1061/(ASCE)CO.1943-7862.0000259
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Captions for Tables and Figures
Table 1. List of activities
Table 2. Actual records of the delayed activities
Table 3. Delay analysis result
Table 4. Project data
Table 5. Apportionment results (in dollars)
Figure 1. As-planned schedule
Figure 2. As-built schedule
Figure Caption List
Journal of Construction Engineering and Management. Submitted May 7, 2009; accepted June 23, 2010; posted ahead of print July 17, 2010. doi:10.1061/(ASCE)CO.1943-7862.0000259
Copyright 2010 by the American Society of Civil Engineers
Figure 1. As-planned schedule
ID Activ ity Description (Responsible Party ) Duration1 Warehouse Project 70 days2 Substructures 30 days3 Excavation (GC) 10 days4 Footing (GC) 20 days5 Superstructures 35 days6 Offsite fabrication (Sub A) 25 days7 Steel f rame installation (GC) 5 days8 Finishes 35 days9 Roof ing (Sub B) 5 days10 Walls and doors (Sub C) 20 days11 Mechanical w ork (Sub D) 30 days12 Electrical w ork (Sub E) 30 days13 Floor and ceiling (GC) 5 days
-1 10 20 30 40 50 60 70 80
Figure 1
Accepted Manuscript Not Copyedited
Journal of Construction Engineering and Management. Submitted May 7, 2009; accepted June 23, 2010; posted ahead of print July 17, 2010. doi:10.1061/(ASCE)CO.1943-7862.0000259
Copyright 2010 by the American Society of Civil Engineers
Figure 2. As-built schedule
ID Activ ity Description (Responsible Party ) BaselineDuration
ActualDuration
1 Warehouse Project 70 days 80 days
2 Substructures 30 days 35 days
3 Excavation (GC) 10 days 11 days
4 Footing (GC) 20 days 24 days
5 Superstructures 35 days 40 days
6 Offsite fabrication (Sub A) 25 days 35 days
7 Steel f rame installation (GC) 5 days 5 days
8 Finishes 35 days 40 days
9 Roof ing (Sub B) 5 days 7 days
10 Walls and doors (Sub C) 20 days 25 days
11 Mechanical w ork (Sub D) 30 days 35 days
12 Electrical w ork (Sub E) 30 days 32 days
13 Floor and ceiling (GC) 5 days 5 days
-1 10 20 30 40 50 60 70 80 90
Figure 2
Accepted Manuscript Not Copyedited
Journal of Construction Engineering and Management. Submitted May 7, 2009; accepted June 23, 2010; posted ahead of print July 17, 2010. doi:10.1061/(ASCE)CO.1943-7862.0000259
Copyright 2010 by the American Society of Civil Engineers
Table 1. List of activities
Code Activity Duration (day) Predecessors Responsible Party
1.0 Substructures GC
1.1 Excavation 10 GC
1.2 Footing 20 1.1 GC
2.0 Superstructures Varies
2.1 Offsite fabrication 25 Sub A
2.2 Steel frame installation 5 1.2; 2.1 GC
3.0 Finishes Varies
3.1 Roofing 5 2.2 Sub B
3.2 Walls and doors 20 3.1 Sub C
3.3 Mechanical work 30 2.2 Sub D
3.4 Electrical work 30 2.2 Sub E
3.5 Floor and ceiling 5 3.2; 3.3; 3.4 GC
Table 1
Accepted Manuscript Not Copyedited
Journal of Construction Engineering and Management. Submitted May 7, 2009; accepted June 23, 2010; posted ahead of print July 17, 2010. doi:10.1061/(ASCE)CO.1943-7862.0000259
Copyright 2010 by the American Society of Civil Engineers
Table 2. Actual records of the delayed activities Activity Duration Remark
Excavation 11 1-day inclement weather
Footing 24 Interruption of concrete supply
Offsite fabrication 35 Sub A’s supplier delivered cold-formed steel late
Roofing 7 Sub B failed to finish roofing within 5 days
Walls and doors 25 Sub C failed to deliver doors and drywalls on time
Mechanical work 35 Sub D was unable to finish the work in 30 days
Electrical work 32 Sub E delayed this work due to changing the supplier
Table 2
Accepted Manuscript Not Copyedited
Journal of Construction Engineering and Management. Submitted May 7, 2009; accepted June 23, 2010; posted ahead of print July 17, 2010. doi:10.1061/(ASCE)CO.1943-7862.0000259
Copyright 2010 by the American Society of Civil Engineers
Table 3. Delay analysis result Window No. Window (Date) Critical Delay (Day) Responsibility
1 1 – 11 1 Excusable and noncompensable
2 12 – 35 4 Concurrent: GC and Sub A
3 36 – 47 – No
4 48 – 72 2 Concurrent: Subs C, D, and E
5 72 – 80 3 Inexcusable: Sub D
Table 3
Accepted Manuscript Not Copyedited
Journal of Construction Engineering and Management. Submitted May 7, 2009; accepted June 23, 2010; posted ahead of print July 17, 2010. doi:10.1061/(ASCE)CO.1943-7862.0000259
Copyright 2010 by the American Society of Civil Engineers
Table 4. Project data
Description Contract Value ($) Direct Cost ($) Labor Hour
Original Actual Original Actual Original Actual
General Contractor 300,000 330,000 250,500 281,500 1,960 2,168
Excavation 20,000 20,000 14,000 16,000 240 240
Footing 80,000 90,000 64,000 76,500 640 768
Steel frame installation 50,000 40,000 45,000 36,000 400 360
Floor and ceiling 150,000 180,000 127,500 153,000 680 800
Subcontractor A 400,000 450,000 360,000 405,000 2,000 2,800
Subcontractor B 100,000 100,000 85,000 90,000 280 280
Subcontractor C 200,000 200,000 180,000 180,000 960 960
Subcontractor D 150,000 120,000 120,000 102,000 2,400 2,240
Subcontractor E 100,000 150,000 85,000 127,500 1,680 2,048
Total 1,250,000 1,350,000 1,080,500 1,186,000 9,280 10,496
Table 4
Accepted Manuscript Not Copyedited
Journal of Construction Engineering and Management. Submitted May 7, 2009; accepted June 23, 2010; posted ahead of print July 17, 2010. doi:10.1061/(ASCE)CO.1943-7862.0000259
Copyright 2010 by the American Society of Civil Engineers
Table 5. Apportionment results (in dollars) Window Party Company
Count Contract Value-Based Direct Cost-Based Labor Hour-Based
Original Actual Original Actual Planned Actual
2 GC 60,000 20,000 20,000 18,113 19,065 29,091 25,830
Sub A 60,000 100,000 100,000 101,887 100,935 90,909 94,170
4 Sub C 20,000 26,667 25,532 28,052 26,374 11,429 10,976
Sub D 20,000 20,000 15,319 18,701 14,945 28,571 25,610
Sub E 20,000 13,333 19,149 13,247 18,681 20,000 23,415
5 Sub D 90,000 90,000 90,000 90,000 90,000 90,000 90,000
Total GC 60,000 20,000 20,000 18,113 19,065 29,091 25,830
Sub A 60,000 100,000 100,000 101,887 100,935 90,909 94,170
Sub C 20,000 26,667 25,532 28,052 26,374 11,429 10,976
Sub D 110,000 110,000 105,319 108,701 104,945 118,571 115,610
Sub E 20,000 13,333 19,149 13,247 18,681 20,000 23,415
Table 5
Accepted Manuscript Not Copyedited
Journal of Construction Engineering and Management. Submitted May 7, 2009; accepted June 23, 2010; posted ahead of print July 17, 2010. doi:10.1061/(ASCE)CO.1943-7862.0000259
Copyright 2010 by the American Society of Civil Engineers